Sterling Infrastructure, Inc. (STRL Quick QuoteSTRL - Free Report) won an Indefinite Delivery/Indefinite Quantity contract from the U.S. Customs and Border Protection (CBP). Per the contract, STRL’s work includes the design and build of critical infrastructure required to support border security, including roads, utilities and other related infrastructure.

Joe Cutillo, Sterling's CEO, stated, "This award is another example of our ability to lever our core skills in other end markets and continue to migrate away from low bid heavy highway work. The strict qualifications, along with extensive bid requirements, ensured only the most qualified contractors were able to bid. TSC's ability to make the short list, and win, demonstrates our strong relationship with the U.S. Army Corps of Engineers and the broad capabilities we have to serve them in the future."

Solid Project Execution Bode Well

This Woodlands, TX-based company specializes in E-Infrastructure, Building and Transportation Solutions principally in the United States, mainly across the Southern, Northeastern, Mid-Atlantic and Rocky Mountain states, California and Hawaii.

The company has been navigating the ongoing supply chain and inflation challenges well with growth in its E-Infrastructure Solutions (its largest segment), E-Infrastructure and Building Solutions. With continued demand for complex site development, STRL has been broadening its customer base with industrial and manufacturing opportunities in E-Infrastructure Solutions, thereby helping it to generate higher profits. Continued focus on the execution of strategic objectives also bodes well.

On Oct 26, STRL’s subsidiary, Ralph L. Wadsworth Construction Company, LLC, received two new projects in Idaho for more than $34 million. The awards combine the Idaho Transportation Department (ITD) infrastructure improvements and a design-build concrete package project.

In the past six months, shares of the company have gained 34.1% compared with Zacks Engineering - R and D Services industry’s 3.1% increase. It is benefiting from solid E-Infrastructure Solutions and Transportation and Building Solutions businesses. September-end backlog and combined backlog levels were at all-time highs, primarily as a result of the new large site development projects in E-Infrastructure Solutions and increased bid activity in Transportation Solutions.

Backed by strong results and backlog level, the company raised its fiscal 2022 guidance. Its current guidance reflects net income improvement by 53%, revenue by 21% and EPS by 47% year over year.

STRL’s earnings for 2022 and 2023 are expected to grow 47.4% and 6.3%, respectively. This Zacks Rank #2 stock has seen a 4.3% upward estimate revision for 2022 earnings over the past 30 days, depicting analysts’ optimism over its prospects.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Picks

Some better-ranked stocks, which warrant a look in the Zacks Construction sector, include Willdan Group, Inc. (WLDN Quick QuoteWLDN - Free Report) , EMCOR Group EME and Altair Engineering Inc. (ALTR Quick QuoteALTR - Free Report) , each carrying a Zacks Rank #2 (Buy).

Willdan is a nationwide provider of professional, technical, and consulting services to utilities, government agencies, and private industry.

WLDN’s expected earnings growth rate for 2023 is 18.5%.

EMCOR is one of the leading providers of mechanical and electrical construction, industrial and energy infrastructure, as well as building services for a diverse range of businesses.

EME’s expected earnings growth rate for 2023 is 17%.

Altair Engineering provides software and cloud solutions in the areas of simulation, high-performance computing, data analytics, and artificial intelligence worldwide.

ALTR’s expected earnings growth rate for 2023 is 21.5%.